How to Buy Shares

A share, simply put, is a unit of stock. The terms stock and share are often used interchangeably, but the technical definition is that a stock is not a countable unit, whereas a share is. When you purchase stock in a company, you purchase a certain amount of shares of that stock. Here’s how to do so.

Step 1

Open an online account with an online brokerage service. Etrade.com and Firstrade.com offer accounts that charge a small fee for every share purchase you make. Many services offer a certain number of free purchases before a fee is assessed.

Step 2

Link to your bank account online. You can set up a separate account just for transactions related to share purchasing rather than linking to your main account. Doing so will enable you to keep track of exactly how much money you have to invest.

Step 3

Choose the amount you want to invest. If you can set aside even $50 or $100 a month, you can start purchasing shares that sell for under these amounts. If you have more to invest, you’ll have more options as to what shares you can purchase.

Step 4

Research the types of shares for sale. You could make an appointment with a financial planner or broker to discuss good shares to invest in, or do research online by reading articles and updates from financial news sources such as CNNMoney.com, Bloomberg.com and Forbes.com.

Step 5

Make the purchase using your online service. Each system has a slightly different user interface, but all are similar to purchasing from an online retailer. You browse through the available stocks, choose the one you want to purchase, choose the quantity of shares and then pay for the shares using your linked bank account.

Warnings

Beware of too-good-to-be-true opportunities; they probably aren’t worth the risk.